The impact of bank credits on non-oil GDP: evidence from Azerbaijan

  • Received April 24, 2019;
    Accepted June 3, 2019;
    Published June 10, 2019
  • Author(s)
    Shahriyar Mukhtarov , Sugra Humbatova ,
    İlgar Seyfullayev
    ORCID Researcher ID
  • DOI
    http://dx.doi.org/10.21511/bbs.14(2).2019.10
  • Article Info
    Volume 14 2019, Issue #2, pp. 120-127
  • TO CITE АНОТАЦІЯ
  • Cited by
    6 articles
  • 1451 Views
  • 234 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

This study explores the relationship between bank credits, exchange rate and non-oil GDP in Azerbaijan, utilizing FMOLS, CCR and DOLS co-integration methods to the data spanning from January 2005 to January 2019. The results from the different co-integration methods are consistent with each other and approve the presence of a long-run relationship among the variables. Estimation results reveal that there is a positive and statistically significant impact of bank credits and exchange rate on the non-oil GDP in the long run for the Azerbaijani case which are in line with the expectations and with the theoretical findings discussed in theoretical framework section. This finding also indicates that a 1% increase in credit and real exchange rate increases non-oil GDP by 0.51% and 0.56%, respectively. The results of this paper are useful for the policymakers and promote the economic literature for further researches in the case of oil-rich countries.

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    • Table 1. ADF unit root test results
    • Table 2. Co-integration test results
    • Table 3. Results from different methods
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Banks and Bank Systems
Banks and Bank Systems